With the value of residential land, particularly in London, still being high despite evidence of a downturn, building owners are frequently looking at the areas in, on, or over the roofs of their property for development opportunities, and of course, profit.
Often planning permission will be required. If it is but is not obtained, obviously that could frustrate the developer's objectives. But whether or not planning is required, there are many property law issues which will need to be considered – which could also frustrate the developer, either entirely or partially.
In most cases, the buildings on which rooftop development is proposed are blocks of flats, sometimes with commercial or retail at ground floor level. In almost all of those cases, the flats will have been sold off on long leases. The prospective developer should consider those leases right away, particularly those relating to top floor flats.
A question of leases
What do the leases say about the roof and roof space? Do they make it clear who owns it? Does it belong to the flat owners, or has it been retained by the landlord? Are there other leases of relevance, e.g. of the common parts, which affect the roof? If the rooftop and/or roof space has been demised, on the face of it, the landlord/developer could not proceed unless the leasehold owners of that space are directly involved in the project in some respect or other.
If the rooftop and roof space has not been demised to someone, are there rights over that space granted by leases of space in the building, e.g. in relation to services, water tanks, storage, access, telecoms equipment and so on? If so, the proposed development might interfere with those rights to such an extent that the lessees concerned could seek a court order to stop the work.
But, despite those points, there could still be hope for the landlord/developer – many leases allow the landlord the ability to undertake development work to the building notwithstanding interference which might be suffered by lessees. However, those too need to be considered carefully, and in the context of the rest of the lease terms. For example, there will be explicit or implicit rights in favour of the flat owners; the 'development' clauses in favour of landlords cannot be used simply to ride roughshod over those rights.
And that's not all. In addition to the lease terms (which may prevent the development the landlord prefers), there might be restrictive covenants controlling development, the flat owners' rights of pre-emption under the Landlord and Tenant Act 1987 might be relevant or there could be an estate management scheme in place meaning someone else's consent is required.
Take comfort from early consideration
One only has to look around to see there are plenty of rooftop schemes under way. So clearly, despite the potential property issues, there will be many cases where a project could work. But it would be prudent to have some comfort about that before committing significant funds to a scheme. It would also be prudent to engage with the flat owners early on too to get them onside. All of that should be with a view to answering the question: "Can we build it?" with a resounding "Yes you can".